Strategically Communicating Corporate Social Responsibility: The Ikea Group

In this blog post, I look at how the Ikea Group (IKEA) designs its CSR policies, communicates those policies to its stakeholders, and how that has changed over time. IKEA is the world’s largest, multinational, flat-pack furniture retail chain, and it is mainly known for its low cost furniture and home decorations, not for its commitment to CSR. IKEA, like Chipotle (Ragas & Roberts, 2009), seldom includes direct messages about its CSR programs in its advertising to consumers (Maon, Lindgreen, & Swaen, 2009), choosing instead to emphasize family, the environment and its Swedish roots. IKEA has chosen to be very cautious about communicating about its CSR programs mainly to avoid promoting itself as a target for anti-globalization activists. However, IKEA, does have an extensive CSR program, designed partially in response to pressure from external stakeholders due to the various environmental and social issues that come with operating in developing countries in order to manufacture its low cost home furnishings. Additionally, over the years, IKEA has dealt with a number of crisis and potential crises related to its business practices, such as child labor in Asia, working conditions in Eastern Europe, and the use of wood from questionable resources, and has developed many of its CSR policies as part of its crisis response strategy.

Devin & Lane (2014) take the perspective that in order to demonstrate corporate social responsiveness, organizations need to communicate about their stakeholder engagement, and how that engagement has informed their socially responsible behaviors. Ikea communicates its CSR policies with its stakeholders in a variety of ways – bi-annual meetings with NGOs, regular and direct contact with city councils, suppliers and trade unions, and through its annual CSR report to the public. In the past, some researchers have questioned whether IKEA’s  communication about its CSR programs is transparent and sufficient. One author’s case study about IKEA and CSR addressed that question in a subsequent article (Maon, 2010) that examined how different stakeholders perceive, react to, and influence IKEA’s CSR commitment and communication.

IKEA’s external stakeholders include NGOs and activists groups that are concerned about business practices. These types of groups can focus media attention on business practices they consider unethical (Cochran, 2007). As a result, IKEA, like most multinational organizations (Burchell and Cook, 2006), faces greater demands for detailed information about the social and environmental impacts of its business activities.  Maon (2010) found that IKEAs’s early annual CSR reports were lacking in specific details about the company’s CSR goals and objectives. Later reports included more detail but were still vague about specific CSR initiatives, and comments from his survey of IKEA’s external stakeholders noted that “IKEA had much to develop when it comes to the interface with the consumers on the marketing side, because they almost don’t speak [about CSR]” (Maon, 2010).

I downloaded IKEA’s most recent public CSR report, The IKEA Group Sustainability Report FY16[1], and examined it to see if IKEA addressed the concerns mentioned above. The current report contains a section titled “About our Reporting”. In the introduction to that section, we learn about IKEA’s data collection practices and the reporting guidelines that the organization used to produce the report. Next, there is a discussion of how IKEA engages with its stakeholders in order to get feedback on its CSR performance and direction. We learn that IKEA started an advisory group of NGOs and partners in 2013 to help IKEA develop and improve its CSR strategy, and that it hosted a stakeholder roundtable event in 2016 to get feedback on the FY’15 report. The last part of this section consists of a series of tables. The first table lists the ten principles of the UN Global Compact (IKEA is a signatory) and provides links to the section of the report that addresses each principle. The second table lists the United Nations Sustainable Development Goals and discusses what IKEA’s strategy is in each of those areas, and provides links  to the relevant sections in the Report where IKEA discusses what it is doing in a particular area. The last table provides the details about specific performance numbers that the survey responders (Maon, 2010) found lacking in the earlier reports. One area where I think that IKEA still falls short is in identifying its stakeholders.  A few of IKEA’s partners are listed in a section titled “Governance and Ethics”, but not much detail is provided about their engagement with IKEA. The report is vague about the participants in the roundtable and the advisory group. It simply mentions NGOs, partners, peers and experts without naming names. While IKEA’s latest annual report seems to be an improvement over past reports, I agree with the arguments made by Devin and Lane (2014) in their article about communicating engagement in CSR. Namely, that the failure of IKEA to communicate in more detail about how they engaged with their stakeholders, which stakeholders they engaged with, and what the expectations of those stakeholders are, demonstrates a lack of transparency on the part of IKEA. That lack of transparency leads to questions about the legitimacy of IKEA’s engagement with its external stakeholders.

Resources:

Burchell, J., & Cook, J. (2006). It’s good to talk? Examining attitudes towards corporate social responsibility dialogue and engagement processes. Business Ethics: A European Review, 15(2), 154-170.

Cochran, P.L. (2007). The evolution of corporate social responsibility. Business Horizons, 50, 449-454.

Devin, B. L., & Lane, A. B. (2014). Communicating engagement in corporate social responsibility: A meta-level construal of engagement. Journal of Public Relations Research, 26(5), 436-454. doi:10.1080/1062726X.2014.956104

Maon, F. (2010). Ikea’s road to corporate social responsibility. The Retail Digest, 74.

Maon, F., Lindgreen, A., & Swaen, V. (2009). Designing and implementing corporate social responsibility: An integrative framework grounded in theory and practice. Journal of Business Ethics, 8771-89. doi:10.1007/s10551-008-9804-2

Ragas, M. W., & Roberts, M. S. (2009). Communicating corporate social responsibility and brand sincerity: A case study of Chipotle Mexican Grill’s ‘Food With Integrity’ program. International Journal of Strategic Communication, 3(4), 264. doi:10.1080/15531180903218697

 

[1] http://www.ikea.com/ms/en_US/img/ad_content/IKEA_Group_Sustainability_Report_FY16.pdf